Wyoming’s Tax Benefits and Establishing Residency

Buffalo in Grand Teton National Park
Buffalo in Grand Teton National Park

Wyoming has long been considered one of the most tax-friendly states in the country. And with mountain and ranch homes becoming even more popular for remote workers, second homeowners and retirees following the pandemic, the Cowboy State’s “tax haven with a view” has become too good to pass up for many. 

MoneyGeek recently rated Wyoming as the No. 1 tax friendly state, as did Kiplinger’s for middle-class families, while several others, including USA Today, WalletHub and SmartAsset have placed the state near the top of their lists for retirees and the wealthy.  

So what makes Wyoming so tax friendly? We’ve included a list of the state’s tax benefits below, followed by how you can establish residency in Wyoming to take advantage of them.

Wyoming: A Tax Haven with a View

1. No Tax on Sales of Real Estate

Wyoming properties are a great investment, and when you sell, you will pay no state tax on the sale of that real estate.

2. No Personal or Corporate Income Tax

If you are still working, you will not have to pay a state tax on your hard-earned income — either personal or through your business — in Wyoming.

3. Dynasty Trusts and Asset Protection

Wyoming is one of the best states for protecting your assets in the long term. Transferring your real estate into a limited liability company (LLC) or family partnership and then putting that into a dynasty trust in the state allows you to shield real estate from federal estate taxes for up to 1,000 years.

4. No State Gift Tax

You can ‘gift’ your real estate owned in Wyoming to your heirs without paying a state gift tax.

5. No Tax on Out-of-State Retirement Income

If you are earning retirement income from another state, Wyoming doesn’t tax that income, and if you’re a Wyoming resident, that other state can’t tax it either.

6. No Inheritance or Estate Tax

Wyoming does not levy an inheritance or estate tax. And if the person passes away with less than the exemption amount, their estate doesn’t owe any federal estate tax either.

7. No Tax on Owning Minerals

If you own minerals such as petroleum or crude oil, Wyoming does not impose a tax on them, unlike many other states.

8. Lower Property Taxes

Wyoming’s property taxes are lower than most other states, and they are only based on the assessed value of your property.

9. No Intangible Taxes

Wyoming does not tax intangible assets like stocks and bonds.

Establishing Wyoming Residency for Tax Purposes

Because the Wyoming Department of Revenue does not collect income tax, it has not set formal requirements for establishing residency in the state. Instead, becoming a Wyoming resident is more about proving you are no longer a resident of the state you’re leaving.

Larger states with heavier taxation like New York and California will often pursue taxes from second homeowners in tax-friendly states like Wyoming. Those states use fact-based criteria for determining taxes owed, but there are not hard-and-fast rules across all states. Instead, you should try to follow as many of the following tips as possible to become a Wyoming resident in the eyes of your former state.

  1. Sell or downsize your home in your former state
  2. Live in Wyoming more often than any other state (and track the time you spend here for your records)
  3. File an affidavit of domicile
  4. Migrate the situs of your trusts to Wyoming
  5. Apply for a Wyoming driver’s license and register vehicles here
  6. Register to vote and vote regularly in Wyoming
  7. Direct your charitable giving toward Wyoming-based nonprofits
  8. Transfer important possessions, like family heirlooms, photo albums and pets, to your Wyoming home
  9. Engage Wyoming service professionals such as local accountants, lawyers, doctor and dentists
  10. Transition to a bank and/or financial planner in Wyoming
  11. Change to your Wyoming mailing address for magazines, credit cards, clubs, etc.
  12. Update documents like passports, insurance policies and wills with your Wyoming address
  13. Join local civil, social and religious groups in Wyoming

Ready to start your Wyoming home search in the Jackson Hole area? Don’t hesitate to contact JH Property Group at jhpropertygroup@jhsir.com or (307) 739-8190 for a custom market search and assessment. 

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